In this paper, I examine the causes of failure in the Gdansk shipyard, and alternatively, the determinants of success in Szczecin and Gdynia. I give particular attention to the role of the initial owner of these companies—the Polish government. Why were these three firms treated differently by the government, and how did this affect their approaches to restructuringŒ I find that in the cases of Szczecin and Gdynia, initial government aid conditionality, combined with pro-active employee support of reforms, produced environments where restructuring had a real chance. In Gdansk, the government and company employees failed to reach agreement on a strategy for initiating reforms. Both feared the potential consequences (economic for the workers and political for the government) of embarking on reforms that were in no way guaranteed to succeed. What emerged was an ongoing stalemate, with company management rejecting a series of reform projects and the government continuing to offer soft credits to keep the unprofitable firm alive. This stalemate, or sub-optimal equilibrium, was linked to the shipyard’s uniquely credible threats of intransigence.

This paper examines the effects of European integration on the Polish steel industry and finds that, contrary to expectations, the more successful firms are in fact being hurt by the process. As a result, productivity improvements are unlikely to be either as great or as efficiently distributed as proponents of integration suggest. This outcome is the product of a complicated and politically expedient bargaining process among steel-sector union confederations and central governments both in the EU and in Poland. The integration plan, which calls for government-controlled production quotas, enables politicians and union leaders on all sides to cover themselves politically with respect to their constituents. The main losers in the process are managers and employees of successful Polish firms.